Environmental Factors

Environmental factors are the environmental considerations that affect the value for money of a purchase and the environmental performance of the goods and services being bought. In Canadian federal procurement guidance, they include life-cycle costs, energy and water use, waste, recyclability, hazardous substances and greenhouse-gas emissions.

The CanadaBuys Supply Manual annexes present environmental factors as cost, performance and environmental considerations that client departments may assess when determining value for money. They sit alongside price and technical merit, so a bid can be judged on more than its purchase price.

Life-Cycle Cost Elements Buyers Can Assess

The CanadaBuys guidance treats environmental factors as part of the full cost of ownership. Rather than comparing only the purchase price, a buyer can account for the following:

• energy or water consumed while the item is in use
• indirect costs and administrative costs
• disposal arrangements and end-of-life costs

A product with a lower sticker price can therefore cost more over its life than a competing product that uses less energy or is cheaper to dispose of. Suppliers who understand this can price and present their offers accordingly.

How the Policy on Green Procurement Frames Them

The Treasury Board Policy on Green Procurement requires environmental considerations to be integrated into procurement planning, acquisition, use and disposal. It also treats environmental performance as part of value for money.

The policy defines environmentally preferable goods and services as those with a lesser or reduced environmental impact over their life cycle than competing goods or services serving the same purpose. That life-cycle test is the standard buyers apply when they weigh environmental factors.

Evidence and Criteria Appearing in Solicitations

The CanadaBuys guidance names several ways environmental factors can show up in requirements and evaluation:

• Minimum performance standards: buyers may set minimum environmental-performance standards for a commodity where enough suppliers exist to preserve competition.
• Incentives: where the supplier base is limited, buyers may include incentives for exceeding baseline environmental criteria.
• Certifications: buyers may ask whether goods or services carry Environmental Choice or ENERGY STAR certification, or whether environmental studies exist.
• Environmental Product Declarations: buyers may request a certified declaration issued by an accredited certification body.
• Materials and circularity: evaluation may address recycled content, refurbished parts or products, and recyclability.
• Supplier climate practices: buyers may consider participation in a greenhouse-gas target-setting, reduction and disclosure program, such as Canada's Net-Zero Challenge or an equivalent.

Environmental Considerations in NATO Procurement

Environmental considerations also appear in NATO procurement. The NATO procurement policy calls for relevant energy-resilience and energy-security considerations to be integrated into procurement activities while maintaining military capability, effectiveness and interoperability.

NATO's climate change and security action plan says the Alliance will address climate adaptation more prominently in its procurement practices and in its partnership with industry.

What It Means for a Supplier Bidding on Canadian Public Contracts

Read the solicitation for every environmental requirement, rated criterion, certification, life-cycle-cost input and reporting obligation. Supply the specified evidence, such as certifications, a certified Environmental Product Declaration or proof of participation in a greenhouse-gas program. Price energy, water, maintenance and disposal costs over the required life cycle where the solicitation asks for them.

The guidance supports these types of requirements, but it does not set one universal obligation for every procurement. The solicitation document defines what applies to your bid.